Kenya Revenue Authority (KRA) has announced the removal of excise duty on bottled water effective from July 1, 2026, a move expected to ease tax obligations for manufacturers and importers while altering compliance requirements for the industry.
The changes follow amendments introduced through the Finance Act, 2026, which revised provisions under the First Schedule to the Excise Duty Act, Cap 472.
In a public notice issued on Monday, KRA informed licensed manufacturers, importers and members of the public that bottled water produced or brought into the country from the effective date will no longer attract excise tax.
“Excise duty on bottled water is removed with effect from 1st July, 2026,” the authority said in the notice.
The tax agency further clarified that products falling within the new timeline would also be exempt from previous stamp requirements linked to excise administration.
“Bottled water manufactured or imported on or after this date will not be subject to excise duty and will not require to be affixed with excise stamps,” KRA stated.
Excise stamps have traditionally been used as a tax administration mechanism to help monitor excisable goods and curb tax evasion. The removal of the requirement for bottled water manufacturers signals a significant operational shift for businesses in the sector.
KRA said additional guidance would be provided to manufacturers regarding the handling of existing stamp inventories and digital systems previously used for compliance purposes.
“The Commissioner will issue detailed guidelines on the return of unutilized stamps and the decommissioning of digital stamps, which will be published on the official KRA website,” the notice said.
Although the tax changes take effect immediately, the authority reminded businesses that existing obligations relating to previous tax periods remain in force.
“Manufacturers are reminded of their obligation to submit their Excise Duty Returns for the month of June 2026 and pay the taxes due by July 20, 2026,” KRA said.
The announcement comes as the government implements provisions contained in the Finance Act, 2026, which introduced several tax adjustments affecting different sectors of the economy.
KRA urged taxpayers and stakeholders seeking clarification on the changes to contact its enforcement division through the channels provided in the notice.
The authority also reiterated its standard advisory to taxpayers, warning that it “will not accept responsibility for payments not received, credited and validated in the relevant KRA accounts.”